S&P Global Ratings has placed Madagascar’s long- and short-term sovereign ratings of B-/B on CreditWatch with negative implications, citing growing political instability following the country’s recent leadership upheaval. The agency warned that the uncertain political environment could disrupt economic reforms, weaken fiscal management, and elevate debt sustainability risks, Reuters reported.
The downgrade alert follows the ouster of President Andry Rajoelina and the subsequent military-backed transition led by Michael Randrianirina. S&P said the current political situation “poses material risks to policy continuity and investor confidence,” adding that it expects governance challenges to weigh on near-term growth prospects.
In its updated outlook, S&P revised Madagascar’s average GDP growth forecast for 2025–2026 to 3.0 percent, down from 4.1 percent, while projecting the budget deficit to widen to 5.3 percent of GDP from an earlier estimate of 4.3 percent. MarketScreener noted that these figures reflect weaker revenue collection and slower project execution amid government uncertainty.
S&P said it could lift the negative watch if the transition leads to a stable administration capable of maintaining fiscal discipline and securing external financing. However, a deterioration in political or security conditions could trigger a ratings downgrade, further complicating Madagascar’s access to international capital markets.
